Help me figure out my personal finances

[chogall]

Maybe you have not received bonuses or options before but it's fairly easy to get mid 4-digit tax returns or payments in the right circumstances.

You also forgot one thing in your analysis - the additional cash in your savings. In your example, instead of having $23,000 locked up in traditional DC accounts, you would have $8,500 in tax deferred accounts and around $7,000 in CASH savings depending on the tax bracket. Those CASH savings goes into your savings pile. Or 10 extra pairs of shoes if you want to YOLO.

If you cannot resist the urge to spend all your savings, go ahead and put them into inaccessible retirement accounts. But just FYI, you will need much more savings outside of maxed IRA and 401/403 to retire.

I hope you are financially matured enough to know how to save money without government intervention. And in your financial planning, I hope you remind yourself the story of social security and Medicare.

 

[norcaltransplant]



Maybe you have not received bonuses or options before but it's fairly easy to get mid 4-digit tax returns or payments in the right circumstances.

Or owe a lot of money. Most bonuses are taxed at a flat 28% rate. For people who are in the 33% and 39.6% tax bracket, and subject to AMT, there is high likelihood that you that you will pay money back to the IRS. E.g the upper middle class wage slave (150-400k).

Maxing out a 401k and the backdoor IRA are really the only good tools for minimizing tax burdens on young, single professionals. Overweight investments in international equities may also provide some benefit, since foreign taxes are credited as deductions. Caveat: this may make a nominal difference and domestic equities have outperformed foreign markets.

--------------------------------------------------------------

RE: Investment Property
I view real estate as a form of leverage. Real estate values tend to appreciate close to the rate of inflation with variance determined by local factors (e.g. hot vs cold markets). I would not suggest investing the majority of your free cash into property if you are single and have ambitions of climbing the corporate ladder. I'm in my thirties and was going to initially buy a place in NYC, but have since changed my mind.

And, FYI, property taxes are NOT deductible if you are subject to AMT.

 

[norcaltransplant]

Did the OP decide what to do?

Your question is probably better suited for Bogleheads.org. With regards to REITS, do not hold them in taxable accounts. They are extremely inefficient. Consider using space in the Roth IRA for a heavy tilt towards REIT and fixed income, domestic equities in a 401k, and international equities in your trading account. This is probably the most tax efficient setup that I haven't quite mastered yet.